• Financial futures and options on futures: the rules relating to the ceiling are specified – Decision of the 3rd and 8th chambers of the French Supreme Administrative Court (“CE”) on December 19th, 2019, N° 431066, Société Deutsche Bank AG

The CE considers that the deductible fraction of losses on symmetrical positions, limited by Section 38, 6-3° of the French Tax Code (“FTC”) to the amount of gains not yet taxed on opposite position, corresponds to the margin which would result from the exercise of the option. Therefore, the deductible fraction must not be computed after deduction of the premium paid by the buyer in consideration for the acquisition of the option.


• Shareholders’ current accounts: rates are published – Official Journal («JO») of December 26th 2019

The deductible interest rate on shareholders’ current accounts for the year 2019 is limited at 1.32%.


• Corporate Income Tax (“CIT”) rate: the standard CIT rate for companies with a turnover amounting to at least EUR 250 million is increased – Finance Act for 2020 n°2019-1479 of December 28th, 2019, Section 39

For companies whose financial years were opened between January 1st and December 31st, 2020, CIT rate amounts to 31% for the fraction of their taxable income exceeding EUR 500,000. For fiscal years starting from January 1st, 2021, the tax rate amounts to 27.5%.


• Merger benefitting from the favourable regime: transfer of tax losses without ruling – Finance Act for 2020 n°2019-1479 of December 28th, 2019, Section 53

For mergers carried out as from January 1st 2020, the transfer of tax losses, net financial expenses carried forward and unused deduction capacity of the merged company is, subject to conditions, exempt from ruling if the amount transferred is less than EUR 200,000. This transfer also applies in case of merger of the mother of a consolidated tax group.




• Hidden activity: no ex officio taxation of an activity not declared by mistake without prior formal notice – Decision of the CE on December 4th, 2019, N° 420488

The CE judges that the ex officio taxation procedure is subject to a formal notice addressed to the taxpayer to regularize his situation within 30 days as soon as he demonstrates a mistake justifying the failure or delay in filing his declaration.


• Social networks: the French tax authorities may collect the content freely – Finance Act for 2020 n°2019-1479 of December 28th, 2019, Section 154

The French tax authorities and the customs are authorised, as part of a three years experiment, to collect and use content freely accessible on websites, which are made public by the users themselves.


•  Non-Cooperative States and Territories (« ETNC »): the list has been updated – Ministerial Order ECOE1932159A on January 6th, 2020

The new list of ETNC includes thirteen States or territories: Anguilla, Bahamas, British Virgin Islands, Panama, Seychelles, Vanuatu, Fiji, Guam, American Virgin Islands, Oman, Samoa, Trinidad and Tobago and United States Virgin Islands. Restrictive tax measures apply to newly black listed States or territories as from April 1st, 2020.

•  Abuse of law: publication of the French tax authorities’ guidelines – BOI-CF-IOR-30-20-20200131

The provisions of Section L 64 A of the LPF rule out abusive transactions which are carried out mainly for tax purposes.



• Tax residence: representatives of companies whose registered office is located in France are concerned – Finance Act for 2020 n°2019-1479 of December 28th, 2019, Section 13

Certain representatives of companies whose registered office is located in France and which have a turnover exceeding EUR 250 million must be considered as performing their professional activity in France, for the taxation of their 2019 income and for gift made and inheritance opened as from January 1st, 2020.


•  Foreign loss-making companies: potential refund of withholding taxes – Finance Act for 2020 n°2019-1479 of December 28th 2019, Section 42

For fiscal years starting from January 1st, 2020, foreign companies in a loss situation or under a liquidation procedure may request the refund of withholding taxes levied on certain income, real estate profits and capital gains on the disposal of shares.




• Individuals’ capital gains: the acquisition price of securities corresponds to their inheritance value – Decision of the 9th and 10th Chambers of the CE on November 27th, 2019, N° 417775

The CE considers that neither the non-payment of the transfer duties nor the fact that the tax reassessment on securities’ capital gain occurred before the end of the reassessment period applicable to transfer duties can call into question the value of the securities declared by the taxpayer at the time of the inheritance.


•  Life insurance contracts: no more exemption for income on contracts concluded before 1983 – Finance Act for 2020 n°2019-1479 of December 28th, 2019, Section 9

Proceeds from life insurance warrants or contracts concluded before January 1st, 1983 are no longer exempt as from January 1st, 2020. However, incomes relating to premiums paid before October 10th, 2019 remain exempt.


•  Wealth tax: no 30% allowance when the main residence is owned by a real estate entity (“SCI”) – Decision of the French Constitutional Council (« CC ») on January 17th, 2020, N° 2019-820 QPC

The CC considers that a SCI’ shareholder cannot be granted the 30% tax allowance for his main residence as he does not have the rights attached to the status of owner of the buildings belonging to the company – even when he holds all the shares in the SCI.


• « Pacte Dutreil » and mixed activity: the French tax authorities’ guidelines are cancelled – Decision of the CE on January 23rd, 2020, N°435562

The CE judges that the predominant nature of an operational activity is assessed in the light of elements determined on the basis of the nature of the activity and the conditions under which it is carried on, and not only in the light of the turnover generated and the amount of fixed assets.